Trade-Ideas LLC identified Lions Gate Entertainment ( LGF) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Lions Gate Entertainment as such a stock due to the following factors:

  • LGF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $55.3 million.
  • LGF has traded 369,021 shares today.
  • LGF is trading at 2.35 times the normal volume for the stock at this time of day.
  • LGF is trading at a new low 4.00% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on LGF:

Lions Gate Entertainment Corp. engages in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution, channel platforms, and international distribution and sales activities. The stock currently has a dividend yield of 1.5%. LGF has a PE ratio of 61. Currently there are 9 analysts that rate Lions Gate Entertainment a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Lions Gate Entertainment has been 2.5 million shares per day over the past 30 days. Lions Gate Entertainment has a market cap of $3.6 billion and is part of the services sector and media industry. The stock has a beta of 1.14 and a short float of 10.9% with 4.34 days to cover. Shares are down 29% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lions Gate Entertainment as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $58.06 million or 29.31% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.13%.
  • 39.74% is the gross profit margin for LIONS GATE ENTERTAINMENT CP which we consider to be strong. Regardless of LGF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.07% trails the industry average.
  • LGF, with its decline in revenue, underperformed when compared the industry average of 7.8%. Since the same quarter one year prior, revenues fell by 10.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Media industry and the overall market, LIONS GATE ENTERTAINMENT CP's return on equity is below that of both the industry average and the S&P 500.
  • The share price of LIONS GATE ENTERTAINMENT CP has not done very well: it is down 24.68% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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